5 Ways AI Helps Travel & Hospitality Brands Handle the Resurgence of Demand

By Replicant
March 15, 2024

The travel and hospitality industry is in the midst of a roaring comeback.

Nearly three-quarters of Americans plan to either maintain or increase their hotel stays in 2024 compared to 2023. International tourism is on track to surpass 2019 highs. And corporate travel spend is predicted to reach 95% of pre-pandemic levels by the second half of this year.

The return of travel and hospitality demand means contact centers at enterprises like hotels, airlines, cruises and rental cars must quickly find a way to scale service efficiently while maintaining high levels of customer satisfaction.

This is especially challenging following several consecutive down years in the industry, which caused many contact centers to be downsized with no way of rehiring in a suddenly bleak agent market.

That’s why AI has emerged as a crucial tool to help the industry navigate their fast-climbing call volumes. Here are five ways travel and hospitality brands are using AI-powered customer service to make a difference.

1. Offload call volume without deflecting customers

Status Quo: Under the traditional contact center model, the primary strategy to reduce the volume of calls that reach agents is to deflect customers to other self-service channels like apps or webpages. But under this approach, customer experience is negatively impacted and the likelihood of customers either calling back or escalating to an agent is extremely high.

Impact of AI: One of the immediate benefits of AI for travel and hospitality contact centers is its ability to fully resolve calls without sacrificing customer service quality. Today, solutions can complete increasingly complex requests without the need for costly seasonal hiring or increased full-time staffing, freeing up existing agents to focus on revenue generating activities while lowering costs by up to 50%.

Under this approach, callers’ requests are completed end-to-end, not deflected or contained. And even during escalations, AI can perform initial request intake to make handoffs faster and more seamless. Common use cases for AI include:

Travel:

Flight Information (FLIFO)
Flight Cancellation
Reschedule Flight
Reservation Management
IROP Overflow
Travel FAQs
Modify Booking
Add a bag or seat

Hospitality:

Guest Authentication
Call Routing
New Reservations
Cancel Reservation
Property FAQs
Confirm Reservation
Modify Reservation
Refunds

Automating just one of these use cases with a high resolution rate can substantially reduce the number of calls that get to agents, allowing them to focus more on their primary interactions:

“Only about 20% of all of our calls in the reservations department are actually related to new reservations,” says Hannah Day, Director of Revenue Management & CRO Operations, Paramount Hospitality. “The rest of the 80% are after the guest books and they either have more questions. About 30% are just people calling a week before or a month before their stay and just confirming details.”

2. Revamp old systems to improve guest satisfaction

Status Quo: Outdated solutions like IVRs and legacy chatbots don’t just limit your contact center’s ability to fully resolve requests, they frustrate travelers. Recent studies show that 61% of callers feel that IVR systems have a poor effect on the customer experience – a number that will only grow as consumers become more accustomed to modern AI interactions.

Impact of AI: AI offers natural language processing capabilities, allowing for human-like conversations in any language and significantly improving the guest and traveler experience. With AI, automation can resolve issues and obtain information from customers without the frustration of navigating through a maze of touch-tone options.

AI can also power the same experiences across every channel. Already, these solutions are achieving high resolution rates with the same or better CSAT scores as an agent – all while decreasing escalations.

“Just setting up a general IVR or routing system to predict how guests are going to go through the flow and ask certain things is a big challenge,” says Day. “There’s a lot of attractiveness with large language models specifically because they allow guests to talk casually and humanlike and the system is able to take care of them.”

3. Seamlessly handle irregular and unpredictable operations

Status Quo: Irregular operations and unpredictable call spikes can overwhelm traditional customer service models. This is especially true in the travel and hospitality industry, where weather events can quickly turn into mass cancellations that lead to high wait times and ensuing negative press.

While travel and hospitality contact centers often use seasonal agents to account for predicted busy seasons, many don’t have a way to scale up quickly when unpredictability strikes.

Impact of AI: AI provides a scalable solution that adapts to changing volumes of inquiries without the need to hire additional staff or outsource to a BPO provider. This not only streamlines operations but also ensures that customer service remains uninterrupted during peak times or when unpredictable surges do occur.

Service leaders can implement AI to act as an always-on agent or as an after-hours or overflow solution to enhance their brands’ reputation for reliability. With either strategy, contact centers gain a level of control during times of irregular operations that was previously impossible.

4. Answer traveler FAQs with realtime updates

Status Quo: Because a large portion of travel and hospitality calls are frequently asked questions, agents spend a huge amount of time fielding repetitive, tier-1 interactions. Even with automation, answering these requests requires a solution that can reliably connect to up-to-date information without going off the rails.

In February 2024, Air Canada’s AI chatbot was shown to lack the proper guardrails for these request types, resulting in an incorrectly promised reimbursement that made headlines around the industry.

Impact of AI: Travel plans can change rapidly, making real-time information essential for travelers. AI excels in providing up-to-date information on a variety of frequently asked questions, such as seat changes, hotel amenities, and local attractions.

By leveraging AI safely and securely, travel and hospitality brands can reliably automate responses to these common queries, ensuring that travelers receive accurate and timely information, which in turn boosts satisfaction and loyalty.

In the demo below, Replicant’s platform integrates with a contact center’s knowledge base to provide realtime answers to customers based on your latest information.

5. Lowering costs and increasing visibility

Status Quo: The increase in travel and hospitality demand is putting pressure on contact centers to commit more of their budgets to hiring and retaining agents. But getting back to pre-pandemic staffing levels is far more expensive today, and customer demand will soon reach record highs. In order to meet demand, contact centers need a way to lower costs, improve their agents’ experience to lower attrition rates, understand their callers better and improve CX.

Impact of AI: Before AI, Paramount Hospitality relied heavily on a BPO to answer overflow and after-hours calls due to hiring challenges. Even with the help of the BPO, they had an average 10+ minute call wait time and a 10% abandonment rate equating to 1,200 missed reservations a month.

After using AI to automate booking, confirming, and reservation management calls, customers could resolve these requests with zero wait times. Paramount spent significantly less with their BPO and required fewer agents while increasing their contact center capacity. In addition, agents could be more engaged as they fielded fewer tier-1 calls, while customers who wanted to speak to an agent could do so faster.

Conclusion

The integration of AI into travel and hospitality extends beyond direct customer interaction and operational efficiency. It also plays a pivotal role in strategic decision-making and long-term planning. By analyzing vast amounts of data, AI can identify high-value opportunities, predict future demand patterns, and suggest optimal automation strategies.

This level of insight not only helps in managing the resurgence of demand in the short term but also ensures sustained growth and competitiveness in the long run. In an industry characterized by its rapid resurgence, AI has become an invaluable solution for transforming travel and hospitality contact centers.